PracticeConsultingConsultancy spend declines

Consultancy spend declines

An upturn in industry fortunes could be short-lived after more than two thirds of management consultants revealed that spending in smaller sectors had declined sharply in 2003.

Link: UK consulting set to dominate Europe

The latest survey by Management Consultancy found that only a handful of minor markets, including retail, transport and consumer goods, made any positive gains in total fee income between 2002 and 2003.

Many sectors ð such as utilities (down £17m), health care and pharmaceutical (down £11.88m), energy (down £21.16m), media (down £2.71m), aerospace and defence (down £58.91m), leisure and tourism (down £7.4m) and the professions (down £10.85m) ð suffered a severe dip in fee income.

Worryingly, firms were found to earn as little as £100,000 from an individual market sector.

The aerospace and defence industry experienced one of the most dramatic declines in fee income in the last financial year, down from £92.8m in 2002 to just under £34m in 2003.

However, the survey found the downturn may partly be due to the way in which the figures were reported. Both CSC and Xansa had previously placed figures into other markets, such as manufacturing and the public sector.

On a positive note, the study found that, despite a drop in fee income between 2002 and 2003 in the utilities sector, it held its postion as the fourth largest market last year, behind the financial sector, public sector and the communications industry.

Spending on consultancy by the retail industry increased and saw it become the fifth largest sector, closely followed by manufacturing. Once one of the most important sectors for consultants, manufacturing can no longer be considered as a major market.

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